An Employer’s Potential Liability for Workers’ Harmful Acts

Is an employer liable for damages caused by the actions of its workers?

When an employee, acting within the scope of the job, commits a crime, such as sexual assault or rape, or another wrongful act that harms another, the employer may be vicariously and/or directly liable to the victim for damages. Yet when such crimes are committed by an independent contractor, the employer may be shielded from liability. So the difference between job classifications is crucial.

Recently, two class action lawsuits in California and Massachusetts were brought against Uber–the app-based, ride-hailing giant– by its “independent contractor” drivers who were seeking “employee” status designation and the benefits that come with it. The lawsuits were settled with Uber making some small concessions to the drivers but, most importantly, maintaining its drivers’ “independent contractor” designation which affords Uber certain financial benefits and protection from liability.

Now Uber faces another potential blow—two of its female riders have brought a lawsuit seeking damages stemming from sexual assault and rape allegedly suffered at the hands of Uber’s drivers in separate incidents in Boston and Charleston. This recent California case again brings the contentious issue of employee vs. independent contractor to the forefront, with Uber’s defense being that the drivers’ independent contractor status protects Uber from any liability for the behavior of such non-employee workers.

California law allows an employer to be held vicariously liable for the torts—wrongful acts that result in injury to another– of its employees as long as the action falls within the scope of the employment. In the pending Uber case, this two-prong test first requires a review and determination that the relationship between Uber and its drivers should be classified as employer/employee (and not independent contractor). Passing that hurdle, the second requirement is to demonstrate that the actions of the drivers fall within the scope of that employment.

What constitutes “within the scope of employment”? In deciding this issue, the court will consider foreseeability–examining the nature of the job and the type of wrongful act committed. It will also consider public policy goals including preventing similar future injuries and adequately compensating victims. Much like cases where police officers have pulled over and then sexually assaulted motorists, the court must determine whether a taxi-like driver sexually assaulting a rider is foreseeable in the scope of that employment.

California law also allows an employer to be held directly liable for negligence for an unfit employee’s actions if it knew or should have known that hiring that worker posed a particular risk of harm and later such harm materializes. In the pending Uber case, the riders are seeking damages for Uber’s negligent hiring, supervision, and retention of their drivers.

At the heart of these negligence claims is whether Uber’s background checks of the drivers were proper. In the Charleston case, the driver had a prior conviction for assault in a domestic violence case. The Charleston rider alleged that Uber knew or should have known that her driver posed a potential danger for the particular harm that she suffered. The court agreed that the negligence issue warranted further examination. Uber’s motion to dismiss the case was denied almost in its entirety, though that is not necessarily an indication that the riders’ claims will all be upheld after trial.

Although in many cases, the employee/employer relationship is clearer and easier to classify, the recent Uber cases should serve as a warning to employers who hire independent contractors to be mindful of the potential for liability for those workers’ actions in the event that classification is challenged in court.

If you need an Employment and Labor Law attorney or need help with an Employment Litigation matter, Carico Johnson Toomey LLP is conveniently located right in the South Bay area of California and offers years of experience and expertise. Call (310) 545-0010.

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